Marketing firm NewsCred raises £15m to expand to London

NewsCred, a marketing technology firm that creates and licenses editorial content for businesses, was today valued at an estimated £120 million after it raised £15 million to expand in London.

Silicon Valley investors Interwest Partners are behind
the latest round of funding which will see New York-based NewsCred hire around
a dozen staff in London for a European expansion drive this year.

Chief executive Shafqat Islam said demand was soaring
from clients such as Procter & Gamble, Pepsi UK and Visa as they look at
new ways beyond advertising to communicate directly with consumers.

He claimed big name-brands “are now diverting major
advertising spend towards news publishing and branded content” to appear on
their own websites and social media — a trend dubbed content marketing.

“The reason why brands are spending money on content is
they have built up massive audiences on a variety of marketing channels where
they have one-to-one relationships [with consumers],” explained Islam,
referring to the rise of Facebook, Twitter and YouTube – sites on which brands
can have millions of followers.

“All of these channels give them access to audiences that
they didn’t have before — 50 years ago, 20 years ago, even 10 years ago. But
they need fuel to put into these channels.”

He went on: “If you take a drinks company, they’re great
at creating fizzy drinks, but they’re not so great at creating highly engaging
and compelling content and that’s where we come in.”

Clients use News Cred to commission original editorial
content and to licence it from over 4,500 publishers including the BBC, The
Economist, The Independent and many others worldwide.

“Our mission is to provide access and licence every piece
of quality journalism in the world,” said Islam, who maintained News Cred does
“no scraping” of content from third-party websites without permission.

News Cred pays publishers a monthly fee, based on the
amount of content that it licenses to clients. The company also commissions
original articles and other material – mostly from freelancers, who receive
“the entire fee” as NewsCred makes better margins from licensing its software
alongside the content to clients. News Cred pays as much as $1000 for long
articles.

“We believe it’s important to fund journalism and drive
new revenues,” said Islam, who explained syndicating editorial content was good
for publishers as revenue falls straight to the bottom line because there is
little cost involved.

Islam claimed NewsCred’s customer base tripled and
revenue increased 400% last year. The seven-year-old company is not profitable
as it continues to reinvest. He would not reveal what valuation investors have
put on News Cred.